Can the EU really make Google and Facebook pay publishers and media?

Google logo__According to a number of media outlets of the Old Continent, the closing weeks of this summer will try to bring a major reform in the European publishing industry. As revealed last week by the Guardian and the Financial Times, the European Commission is working on a plan to give news publishers the right to demand payment from services like Google and Facebook for using their content. Despite the fact that an actual proposal will only be unveiled by Brussels in September, the plan itself sounds already like a radical change for the news industry.

A bigger plan

The measures are currently under development and there’s still a lot to find out around them, but what is already certain is that the proposals are part of a wider plan by the European Commission to weaken the dominance of internet giants in Europe, whose market share has ultimately slashed the revenues of newspapers and other traditional publishers.

A recent report published by the Guardian showed that online platforms such as Facebook will suck £450 million out of the UK news industry over the next decade. The report by strategy consultants OC&C says that, based on the impact of platforms on other mature media markets such as music, about 30% of annual digital revenue could go to platforms. That would mean the likes of Facebook and Apple taking between £200m and £250m a year this year, rising to between £400m and £450m from 2026.

Increasing pressure from publishers

Such figures suggest that the Guardian is probably more than right in saying that the Commission must have come under increasing pressure from publishers to level the playing field, after years of losses. The Financial Times indeed reports that the Commission sees the “dwindling revenues” at traditional news organisations as the core of the issue. A failure to push on with such a policy, according to the Commission’s draft document, would be “prejudicial for […] media pluralism”.

In its draft proposals, the words that the Commission reportedly uses actually leave no space for misunderstandings. “The sustainability of publishing industries in the EU may be at stake, with the risk of further negative consequences on media pluralism, democratic debate and quality of information”, as quoted by the Guardian. Therefore, the Commission will rule to let news publishers receive “exclusive rights” to make their content available online to the public, in a move that would “force services such as Google News to agree terms with news organisations” for showing extracts of articles, as revealed by the Financial Times.

Video and music content under the lens

The working document by the European Commission has also space for platforms like YouTube, Vimeo and Dailymotion, as circulated on many newspapers recently. The music industry has long complained that services such as YouTube do not pay artists adequate amounts for their music and has openly asked regulators to close the gap. Now the Commission is looking at imposing an obligation on platforms hosting user-uploaded content to seek agreements with rights holders “reflecting the economic value of the use made of the protected content”, as described in the draft documents.

YouTube uses Content ID, which automatically identifies an artist’s content, to give rights holders the choice of whether to leave it as it is, block it or monetize it through a revenue-sharing deal, and Google says that the music industry chooses to monetize 95% of its Content ID claims, generating more than $ 2 billion for rights holders. But rights holders say they do not have enough contractual power and that there’s never a fair discussion with online platforms since they have obligation to negotiate with them.

A jeopardized approach

The non-compulsory nature of the resolution and many of the aspects that online platforms have claimed as a defense of their conduct may carry the risk of creating a lot of uncertainty when the plan will be unveiled, and there could be more to come. It is true that the draft proposal already shows that the plan has been designed to be quite protective for the so called “traditional” publishing industry, but on the other hand there would be also the risk of creating a more fragmented market rather than a unified one. As an example, it is important to keep in mind that there would be no obligation on publishers to make Google pay for using their content. Many indeed may also choose to continue making their journalism available at zero cost in the hope of attracting more readers and having a broader range.

EU-US clash

What sounds almost sure, despite the huge uncertainty, is that the move will represent a new challenge for the already strained relationship between Silicon Valley and Brussels, which has been through hard times lately over issues concerning free competition, tax and privacy. The EU-Google file is more-than-ever hot and there’s a recent case of the US Treasury department attacking the Commission’s moves to obtain billions of euros from Apple for an alleged tax evasion case in the Old Continent.

The Commission seems anyway more than convinced to present the plan despite the risk of opening a real quarrel with US firms, in the name of the creation of a digital single market that stretches its borders up to this matter too. The mission has the aim of reducing the differences between national copyright schemes and now the Commission must have realized that a jeopardized approach on this topic didn’t produce good effects in the past.

Prior efforts to force internet firms to pay up in European countries such as Germany and Spain, where Google reacted to a mandatory charge by shutting down Google News, indeed show how difficult the whole endeavour will eventually be. Hence, the Commission needs to be prepared now for a powerful reaction by the US Internet giants against its desperate plans to save the lives of media moguls of this continent.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

On International Youth Day the European Youth Forum calls for true youth participation

How bad could British healthcare get for its citizens abroad post-Brexit?

A Sting Exclusive: “Delivering on the Environmental Dimension of the new Sustainable Development Agenda”, Ulf Björnholm underscores from UNEP Brussels

Migration crisis update: The “Habsburg Empire” comes back to life while EU loses control

EU seems to fail its moderate migration promises postponing them for end 2015

IMF – World Bank meetings: US – Germany clash instituted, anti-globalization prospects visualized

G20 World Exclusive Interview: “The world, especially emerging economies and developing countries, require a more sustainable and quality development”, the Spokesperson of Japan underscores live from Antalya Turkey

The EU Parliament sidesteps the real issues about banks, while the US target the Eurozone lenders

It’s Trump’s anti-globalization and inward-looking rhetoric that perturbs GOP and US

An FTA between EU-US to hurt South Korea

EU prepares for the worst case scenario as Turkey seems to be withdrawing from the migration deal

A neo-liberal toll free Paradise for the super rich and tax hell for wage earners

New VAT rules in the EU: how a digital sea could have become an ocean

Bank resolutions and recapitalisations by the ESM may end up politically swayed

Can the national and age groups pockets of unemployment cause irreparable damages to Eurozone?

Eurostat: Real unemployment double than the official rate

MWC 2016 LIVE: GTI shifts to phase two – 5G – after hitting milestones

Recession: the best argument for growth

The Eurogroup has set Cyprus on fire

EU, Brazil to hold high level Summit in Brasilia

Migration has set EU’s political clock ticking; the stagnating economy cannot help it and Turkey doesn’t cooperate

The four top Americans who flew to Europe perplexed things about Trump’s intentions

A Sting Exclusive: “Our ambition is by 2020 Indonesia to become an emerging power of World’s Maritime Access”, reveals the Chargé d’Affaires at the Embassy of Indonesia in Brussels, treating WEF, ASEAN and EU-Indonesia relations on the eve of the World Economic Forum East Asia 2015 in Jakarta

Draghi drafts a plan to donate more money to bankers, the era of ‘money for nothin’ is flourishing

Any doubt?

The European Sting at the Retail Forum for Sustainability live from Barcelona

Five years down the drain

Who is to pay the dearest price in a global slowdown?

Memoirs from a unique trip to China: “my new old dragon” (Part II)

Draghi: printing a full extra trillion non negotiable to help all borrow cheaply

Campaign kicks off with High-level Event on #FairInternships

Do academia and banks favour a new Middle Ages period?

Google strongly rejects EU antitrust charges and now gets ready for the worst to come

The Eurogroup+ is born to govern the EU Banking Union

Varna (Bulgaria) awarded European Youth Capital 2017

At the edge of humanity: refugee healthcare in Greece and the EU

IMF v Germany: Eurogroup keeps the fight under control

EU seeks foreign support on 5G from Mobile World Congress 2015 as the “digital gold rush” begins

Eurostat confirms a dangerously fast falling inflation in Eurozone

Is the EU’s enlargement over-stretched?

G20 LIVE: “International communities and leaders have great expectations for 2016 G20 summit in Hangzhou China”, Mr Wang Xiaolong, the Chinese Foreign Ministry’s special envoy stresses live from G20 in Antalya Turkey

Will Turkey abandon the refugee deal and risk losing a bonanza of money?

Snowden is the “EU nomination” for this year’s Oscars

Young students envision turning Europe into an Entrepreneurial Society

Dangerous Trumpism in the Middle East with an anti-European edge

Grexit no longer a threat but how to manage a “tutti frutti” government if not with fear?

The Sting’s Mission

Desires for national independence in Europe bound by economic realities

Germany fears that Americans and Russians want to partition Europe again

UK economy in dire straits: leading banks now officially plan to Brexit too

European Business Summit 15th year: Controversy and Constructive Ideas

Eurozone set to abandon monetary and incomes austerity and adopt growth friendly policies

The 13th round of TTIP negotiations hits a wall of intense protests and growing concerns

China’s stock markets show recovery signs while EU is closely watching in anticipation of the €10bn investment

Who really cares about the 26.2 million of EU jobless?

MWC 2016 LIVE: T-Mobile US reveals 5G trial plans

CDU-SPD agree the terms for EU’s Banking Union

Pharmaceuticals spend millions to push TTIP while consumer groups spend peanuts

Light at the end of the Eurozone tunnel

More Stings?

Comments

  1. Thanks for this post. I definitely agree with what you’re saying. I’ve been talking about this topic a whole lot lately with my brother so hopefully this will get him to see my point of view. Fingers crossed!

  2. I believe one of your advertisings triggered my internet browser to resize, you might well want to put that on your blacklist.

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s